Factors Affecting Commercial Real Estate Business Valuations

Valuing a commercial real estate business property isn’t quite the same as valuing residential agencies or the properties themselves. While property value plays a role in the broader market, what really matters when selling your agency is the strength, stability and performance of the business behind it.

At BDH Valuers, we specialise in valuing real estate businesses, including commercial-focused agencies. If you’re thinking of selling, here are some of the factors which will affect how much your business is worth.

1. Income and business model

The most common method for valuing real estate businesses is based on income, typically using a capitalisation of future maintainable earnings. A commercial agency with a history of generating steady income stream from management fees, leasing commissions and sales can attract a stronger multiple, particularly if income is diversified and recurring.

Ad hoc income from things like one-off lease renewal fees or irregular consultancy work carries less weight in the valuation process, as buyers prefer predictability. Ancillary fees inform the value but the fees don't form the basis of value. It is not uncommon for the multiplier to be discounted if ancillary fees are not collected. 

2. Rent roll and management agreements

For agencies managing commercial properties, the rent roll is often the most valuable asset. Its quality, scale and profitability are critical in determining the value of your business.

Factors such as average management fee, arrears history, length of management agreements and client concentration (how many properties are owned by the same client) will all be assessed. Commercial rent rolls typically transact at lower multiples than residential ones, and they also require deeper analysis due to more complex lease structures.

3. Client base and lease complexity

An agency servicing high-value clients with large commercial portfolios will be more appealing to buyers. Other factors to consider include the type of properties under management (offices, retail, industrial, etc) and how complex the lease arrangements are. In other instances, a consistent spread of clients (similar to a diversified portfolio) is favourable, as it gives stability through economic change.

Experience with long-term leases, market rent reviews, incentive structures and lease-back arrangements all contribute to the perceived sophistication of your agency and can lift the valuation.

4. Staff structure and internal processes

A well-run agency doesn’t rely entirely on the owner. If your commercial property managers, leasing agents and admin team can operate without constant oversight and without eating too dramatically into profits, that’s a big plus. 

Buyers will review staff tenure, client relationships, documented procedures and software systems to assess how easily the business can transition.

Being too heavily involved in day-to-day operations as the business owner may reduce the saleability or value of the business, as buyers factor in risk and potential disruption. This can become apparent during the retention period and potentially affect the final price.

5. Local market and brand presence

Operating in a high-demand area and having an impressive client list makes a commercial real estate agency more attractive but there are less tangible factors as well. 

Your agency’s reputation, online presence, referral partners, online reviews, media presence and market share all contribute to how buyers will perceive it and the value. 

A recognisable brand with a positive reputation in commercial circles can boost buyer confidence and valuation alike. If you’re planning to sell, paying close attention to this in the leadup to the sale can make a difference to your final outcome. 

6. Legal structure, compliance and documentation

Up-to-date agreements and policies, clean financials and a clear legal structure make the business valuation and sale process smoother. Buyers want to confirm your business is compliant with relevant legislation, trust accounting rules, licensing and tax obligations.

Any legal ambiguity, outdated management agreements or undocumented arrangements will trigger red flags and can reduce perceived value.

7. Demand

Regardless of the business, everything comes down to supply and demand. 

The good news for commercial real estate agencies in 2026 is national vacancy rates are sitting below 3 per cent, and industrial and logistics facilities are still highly sought after. After a tricky few years, the forecast is for “industry recovery” and plenty of activity in the sector thanks to stable yields, limited supply and increasing values. 

With commercial property values increasing, so too will the value of a successful commercial real estate agency, but of course it depends on all the previously listed factors. 

Why it pays to work with a specialist real estate business valuer

Valuing a real estate business focused on commercial property requires industry understanding because of the unique nature of the industry. 

At BDH Valuers, we specialise in business valuations for real estate agencies across Australia. We understand the inner workings of commercial rent rolls, management agreements, income streams and agency operations. If you're planning to sell or simply want to understand what your agency is worth, speak to our team about a tailored business valuation today.

FAQs

• What is the most important factor in valuing a commercial real estate agency?

  The key driver of value is the strength and stability of the business itself, particularly its income and business model. Agencies with diversified, recurring income streams from management fees, leasing commissions and sales typically attract stronger valuation multiples than those relying on irregular or one-off income.

• Why does the quality of a commercial rent roll matter so much in a valuation?

  For commercial agencies, the rent roll is often the most valuable asset. Its scale, profitability, management fees, arrears history, client concentration and the length and complexity of management agreements all directly influence how buyers assess risk and value the business.

• How does owner involvement affect the value of a commercial real estate agency?

  Agencies operating without heavy day-to-day involvement from the owner are generally more attractive to buyers. A capable team, documented processes and established systems reduce transition risk, while over-reliance on the owner can limit saleability and lower the valuation.

Understand the total value of your commercial real estate business, get in touch with with BDH Valuers today.